“Amid significant
contraction in consumer demand and ruble appreciation in
February-May 2015, consumer price growth continued to slow down.
According to the Bank of Russia forecast, given these factors
annual inflation will fall to less than 7% in June 2016 to reach
the target of 4% in 2017,” the bank said in a statement Monday.
The CBR added that it
was ready to continue cutting the rate, but the scale of the cut
will depend on inflation in the coming months.
This marks the fourth
consecutive rate cut this year, which shows the regulator sees
the inflation danger fading and the ruble having found its fair
value.
Last week the weekly inflation rate in Russia reached zero, the
first time since early August 2014.
READ
MORE: Russian Central Bank cuts key rate to 12.5%, cites risks of
economic cooling
On December 16, the Russian Central Bank hiked the key interest
rate to 17 percent in an attempt to halt the ruble depreciation.
The first reaction saw the currency lose more than 20 percent,
with one dollar buying 80 rubles on the day. However, the ruble
has significantly recovered this year, trading at about 55
against the greenback on Monday on the Moscow Exchange.